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Apr 10, 2016

Exclusive Brethren told to 'pray for the IRD' after favourable settlement

Bevan Hurley Stuff April 10, 2016

Bruce Hales is the worldwide leader of the Exclusive Brethren, pictured with his wife Jennifer.

A hardline Christian sect has told its worldwide following to "pray for the Inland Revenue Department" after a breakthrough settlement in a tax dispute.

In a prayer agenda, the Exclusive Brethren church told its 45,000 worldwide members in had received a "favourable settlement" in a dispute over schools' fees.

"Outcome – NZ IRD matter – a favourable settlement was arrived at for school fees and fee relief. The attitude of NZ IRD should be applauded."

A business conference in Auckland this week had a very special guest speaker - the brother of the worldwide leader of the Exclusive Brethren church.

The church last hit the headlines in New Zealand when it funded a secret smear campaign against the Green Party – a dirty politics revelation that cost their chosen candidate Don Brash the 2005 election win.

Now, other items on their prayer agenda encourage followers to pray for National-led coalition to send troops to fight ISIS. "The Government will be strengthened in its resolve to support the US and allies in sending troops to Iraq in the fight against anti-Christian evil forces."

The Exclusive Brethren, who say they are apolitical, are a secretive sect who preach the world is evil. Contact with outsiders is discouraged. Its leader Bruce Hales has told followers to get a "hatred, an utter hatred of the world".

The sect runs its own private Westmount Schools, which have received $14.5 million from the Ministry of Education in the past five years.

IRD group tax counsel Graham Tubb was bemused by the prayer agenda. "It's great to hear that people are praying for us – I don't think it happens all that often."

Tubb said the year before, the IRD had sought to clarify the meaning of a "gift" donations to private schools.

For example, he said a gift or donation, tax exempt for organisations like the Brethren who have donee status, must be given without any expectation of getting something in return. So a donation from a parent or grandparent to a school couldn't be deemed a gift.

A Brethren spokesman said the dispute with the IRD concerned only one school: "It's a confidential matter between the school and the IRD."

Specialist tax barrister James Coleman said the ruling could have implications for parents looking to donate to schools that their children attend.

"It's important to clarify what are the uses that can be made of it, what sort of situations can gifts be accepted.

"If a parent has got three kids at the school and one's really good at sport, is donating to the school gymnasium getting a benefit back? You can get close to the line, but this case has gone over the line."

He said settling before a dispute got to court was beneficial for all sides, as it saved them hemorrhaging cash on litigation.

Recent Education Review Office reports have given positive feedback on the Brethren schools. Figures released under the Official Information Act shows the most popular subject is accountancy, with 726 students taking NCEA level 1, 2, or 3 exams in 2014, out of a roll of 1600.

An analysis of Education Review Office reports of the past five years reveals Westmount schools had a single non-Pakeha student enrolled at its schools.

Former Brethren member Craig Hoyle said the schools exacerbated the isolationism and bigotry of those who grow up in the religion.

An investigation into the church has found dozens of trusts are controlled by church members lawfully receive tax deductions on donations, without registering on the Charities Register. But a spokesman for the church said it wasn't obliged to register.

The New Zealand charitable trusts, which own 191 churches and halls around New Zealand, run the Brethren's Westmount schools, and even a Brethren travel agent, are understood to be controlled by members loyal to the worldwide leader, Sydney-based accountant Bruce Hales.

It's understood New Zealand Brethren members pay large amounts of donations direct to Hales, who flies by private jet, and is known as the Elect Vessel.

In 2015, Hales said a mentally unstable New Zealand Brethren member who was in contact with excommunicated members – known as "opposers" – should 'drink rat poison".

A church spokesman said the remarks made by Hales at a church meeting had been taken out of context and applied with a literal interpretation. "He is using a common, everyday, metaphor used to describe the effect on a person coming into contact with another person whose beliefs and values are different from their own and potentially damaging."

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